Amendment 3 might Declare Income Tax Unconstitutional

Early Voting for the Nov. 4 mid-term ends on Friday this week. In addition to voting for Governor and legislators at both the state and federal levels, Tennessee voters will see four constitutional amendments on their ballots.

Voting Yes on Amendment 3 will add the following paragraph into Article II, Section 28 of the Tennessee Constitution:

“Notwithstanding the authority to tax privileges or any other authority set forth in this Constitution, the Legislature shall not levy, authorize or otherwise permit any state or local tax upon payroll or earned personal income or any state or local tax measured by payroll or earned personal income; however, nothing contained herein shall be construed as prohibiting any tax in effect on January 1, 2011, or adjustment of the rate of such tax.”

This means that the state constitution, if amended, would prevent lawmakers from introducing any legislation to raise Tennessee’s income tax.

Tennessee is one of nine states that do not tax personal income and generally has the one of the lowest tax rates in the country, but this amendment would make the state the first to declare income tax unconsitutional.

Proponents of the amendment say that the state’s lack of income tax attracts businesses to the state and an outright prohibition of the tax will only make Tennessee more appealing in that regard.

Raising Tennessee’s sales tax has long been the legislative solution to building revenue for an income-tax-averse government. State sales tax is the highest in the nation at seven percent. Depending on additional taxes from local municipalities, it can climb as high as 9.75 percent.

A vote for No on Amendment 3 will keep the Constitution as previously written, allowing for flexibility on any possible future income tax legislation.

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